This checklist is not all inclusive because legal due diligence can vary from  country to country.

Before purchasing property always employ the services of an independent Lawyer who can guide you through the purchase process.  
 

Many Lawyers only cover the conveyance  aspect of the purchase and there are other important matters which should  be  included in a due diligence (see below).  Buyers need to instruct their Lawyers if they want the additional due diligence work done.

Some Questions to ask before purchasing a property abroad  
 

• Is it a freehold, leasehold, fractional ownership, sectional title or other please specify .
• Has the property received full licence to build?
• What other licences apply and have they been received ?
• Is the licence in accordance with the overall plans for the area?
• Confirm the developer is building in accordance with the licence and that this is a contractual obligation he has taken on ?
• Is the title clear of encumbrances and liens.
• Is there any security in place to protect payments made prior to completion and if so get details and a legal opinion on it.
• If no security is in place to protect your payments prior to completion what other security can  be put in place and what’s the cost of this.?
• Is the purchase contract notarised and registered ?
• Does the client have to buy as a legal entity / set up a minimum liability company? Important if they want to own a share of the common property in an apartment complex.
• Does the price include full VAT ? What % of the VAT has the developer paid and is the client liable for any additional VAT payments.
• If there is a guaranteed rental attached to the purchase how doers it work and who provides the guarantee the developer or a third party bank or other, please specify ?
• What is the percentage guaranteed rent and for how long?
• When is the Guaranteed rental paid. Monthly? Quarterly? Yearly?
• Is this the net or gross %.
• When they Guaranteed rental of € / SQM is this based on the fully living area including the communal or not?
• Is the guaranteed rent part of the purchase contract or a completely separate agreement ?
• If a separate agreement please provide all the relevant information so the Lawyer can assess the risks here and provide the client with a due diligence report on this.
• Who will own the common areas and facilities of the development ?
• What are the maintenance costs for this development?
• Do the owners have a choice about choosing a new management and rental company.
• When do you pay the annual maintenance?  Is it charged when you sign the final contract or monthly, quarterly, annually?
• What are the annual charges and taxes relating to the property ?
• Estimate of Insurance / running costs- not always available for off plan purchases.
• If no guaranteed rent is there a management and rental company and please supply details.
• Is there a price comparison report available?
• Is the plumbing and electricity already connected?
• Is the apartment fully furnished? Is it turn-key?
• If so get a list?
• If so are the contents attached to the purchase contract?
• Is the specification of the property documented and attached to the purchase contract ?
• Is there a building Guarantee or not?
• How long is the building Guaranteed for?
• Is there a penalty clause in the contract for late completion  and what does it stipulate?
• Who is the lawyer for the developer?
• Is the deposit refundable? What exactly are the terms?
• Is there a separate reservation agreement signed and what are the clauses in this?
• If  re-fundable for how long?  Get this in writing from the developer.
• What facilities are on site and are all these specified in the purchase contract ?
• Get details of the properties like size, size excl terraces, size of terraces, specifications, size of swimming pool, included in the purchase contract ?
• Is there 24 hour security on site

This list is not all inclusive and will vary depending on the country of purchase. Use as a rough guide only and always use the services of a Lawyer before purchasing property. 
 

Prepared by Noreen Hynes

Managing Director

Aquarius Properties

15/01/009